Volkswagen (VW) has been under investigation since 2015 for installing software in diesel vehicles to cheat emissions tests. In September of that year, the Environmental Protection Agency (EPA) issued a notice of violation, and since then, the consequences for the German automaker have only piled up. On January 11, 2017, the Department of Justice (DOJ) announced that Volkswagen had agreed to plead guilty to three criminal felony counts and pay $4.3 billion in civil and criminal penalties. Here`s what you need to know about the VW DOJ plea agreement.
Criminal Charges
Volkswagen has admitted to three felony counts under the Clean Air Act: conspiracy to defraud the United States, obstructing justice, and importing and selling vehicles using cheat devices. VW executives were found to have intentionally designed and installed software in diesel engines to detect when they were being tested for emissions and reduce their output accordingly. The software was then programmed to turn off during normal driving, allowing the engines to emit up to 40 times more nitrogen oxide than the legal limit. The DOJ called it a “massive conspiracy” that lasted for nearly a decade.
Penalties
Under the VW DOJ plea agreement, Volkswagen has agreed to pay $2.8 billion in criminal fines and $1.5 billion in civil penalties. The criminal fines are in addition to the $17.5 billion settlement that Volkswagen reached with the EPA and California Air Resources Board in 2016. The funds will go towards compensating customers who bought the affected vehicles, promoting zero-emission vehicles, and mitigating the environmental harm caused by excess emissions. Volkswagen has also agreed to cooperate with ongoing investigations and audits, and to implement an independent compliance monitor for at least three years.
Consequences
The VW DOJ plea agreement is one of the largest settlements in U.S. history and sends a strong message to other automakers that environmental violations will not be tolerated. However, some critics argue that the penalties are not severe enough to deter future misconduct. VW has avoided criminal charges against individual executives and has not admitted to any wrongdoing outside of the United States. The company still faces civil lawsuits and investigations in other countries, and its reputation and market share have suffered as a result of the scandal.
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